According to a new IDB assessment, Caribbean countries should brace for sustained external economic shocks in 2023, including high food and gasoline costs and rising interest rates (IDB).
Higher interest rates could cause economic slowdowns or recessions in crucial Caribbean export markets.
According to the paper ‘Headwinds Facing the Post-Pandemic Recovery,’ the impact of these shocks depends on each country’s trade structure and external finance needs.
Households and companies are feeling price rises, according to the survey.
“While domestic inflation has been less severe in Caribbean countries, rising prices lower real earnings for people and increase business costs for firms,” it said, stressing that World Food Programme online polls suggest a substantial rise in food insecurity across the Caribbean.
By midsummer, yearly inflation in the Caribbean countries studied by the research averaged 8%, excluding Suriname, which has had significant inflation since fall 2020.
IDB Caribbean economist. David Rosenblatt hopes “external situations improve in 2023.”
As with natural disasters, it’s wise to prepare for the worse while hoping for the best.
The report’s authors propose many reform goals, including sustained fiscal consolidation and debt management and targeted initiatives to help people cope with rising food and fuel prices.
The IDB’s Caribbean Economics Quarterly series includes “Post-Pandemic Headwinds.”
